Health Insurance Marketplaces

While most states use the same income ranges to determine eligibility for tax subsidies through the health insurance marketplace, Alaska has a different range. Below is the range for Alaska residents. Be sure to read up on other rules to find out if you can receive premium assistance. Or if you prefer, simply use our subsidy calculator tool.

Alaska Health Insurance Marketplace Tax Subsidy Requirements

Income levels required to receive tax subsidies on health insurance plans purchased on the marketplace.

Number of People in Household

1

2

3

4

5

6

Lower Premiums if income is between:

$14,580 – $58,320

$19,660 – $78,640

$24,740 – $98,960

$29,820 – $119,280

$34,900 – $139,600

$39,980 – $159,920

Lower Premiums AND Lower Out-of-Pocket Costs if income is between:

$14,580 – $36,450

$19,660 – $49,150

$24,740 – $61,850

$29,820 – $74,550

$34,900 – $87,250

$39,980 – $99,950

You may not qualify for Medicaid if your income is below:

$14,580

$19,660

$24,740

$29,820

$34,900

$39,980

Health insurance marketplace tax subsidies are a great way to help pay for the cost of insurance when you buy a plan. Make sure to take advantage.

While most states use the same income ranges to determine eligibility for tax subsidies through the health insurance marketplace, Hawaii has a different range. Below is the range for Hawaii residents. Be sure to read up on other rules to find out if you can receive premium assistance. Or if you prefer, simply use our subsidy calculator tool.

Hawaii Health Insurance Marketplace Tax Subsidy Requirements

Income levels required to receive tax subsidies on health insurance plans purchased on the marketplace.

Number of People in Household

1

2

3

4

5

6

Lower Premiums if income is between:

$13,420 – $53,680

$18,090 – $72,360

$22,760 – $91,040

$27,430 – $109,720

$32,100 – $128,400

$36,770 – $147,080

Lower Premiums AND Lower Out-of-Pocket Costs if income is between:

$13,420 – $33,550

$18,090 – $45,225

$22,760 – $56,900

$27,430 – $68,575

$32,100 – $80,250

$36,770 – $91,925

You may qualify for Medicaid if your income is below:

$18,699

$25,295

$31,892

$38,488

$45,085

$51,681

Health insurance marketplace tax subsidies are a great way to help pay for the cost of insurance when you buy a plan. Make sure to take advantage.

A big aspect of the Affordable Care Act is the availability of tax subsidies for people that fall into certain income brackets. You can check those brackets out here. We also have this handy subsidy calculator that can help determine if you might be eligible for premium assistance when you purchase a health insurance plan. Before you assume that you will get a subsidy, make sure your non-income eligibility requirements are met.

Marketplace Tax Subsidy Calculator

A big piece of the Patient Protection and Affordable Care Act (PPACA) was the availability of a marketplace tax subsidy to help offset the cost of health insurance when a plan is purchased on the health insurance marketplace, or exchange. The system was designed to help those with lower income levels afford quality coverage. The question that we get all the time is, “what are those levels?” Here is a chart showing the income levels required to receive a marketplace tax subsidy.

Income levels required to receive tax subsidies on health insurance plans purchased on the marketplace.

Number of People in Household

1

2

3

4

5

6

Lower Premiums if income is between:

$11,670 – $46,680

$15,730 – $62,920

$19,790 – $79,160

$23,850 – $95,400

$27,910 – $111,640

$31,970 – $127,880

Lower Premiums AND Lower Out-of-Pocket Costs if income is between:

$11,670 – $29,175

$15,730 – $39,325

$19,790 – $49,475

$23,850 – $59,625

$27,910 – $69,775

$31,970 – $79,925

If your state is expanding Medicaid, you may qualify for Medicaid if income is below:

What is the Definition of Yearly Income for Health Insurance Marketplace Tax Subsidy Purposes?

The yearly income that is used to determine eligibility for tax subsidies is, for most people, the adjusted gross income. The term that is used on the marketplace application is modified adjusted gross income. This figure takes into account income such as tax-exempt Social Security payments, interest, and foreign income.

The yearly income that is used to determine eligibility for tax subsidies is, for most people, the adjusted gross income.

The modified adjusted gross income also takes into account deductions that you may claim on your tax return. These deductions should be entered during the marketplace application process:

Student loan interest

Educator expenses

Job-related moving expenses

Alimony payments

Individual retirement account contributions if you do not have a retirement account through work

Tuition costs if you pay them out of pocket and claim them on your taxes

Do not enter items such as mortgage interest and charitable contributions. These are taken into account elsewhere.

What if My Income Changes During the Year?

One of the biggest challenges to determining eligibility for a marketplace tax subsidy is estimating your future earnings. When you are filling out the health insurance application online, you are guessing what your income is in the next year. For some people that can be a difficult task. If your income changes during the year, you must report that to the marketplace as soon as possible.

Who to Include as a Member of Your Household?

As you can see, your chances of eligibility for a marketplace tax subsidy increases if you have more people in your household. So the question is, who all should be included as a member of your household? Short answer:

The long answer to who counts as a member of your household can be found here.

Make sure to include everyone in the household, even those not needing health insurance through the exchange. Much like reporting income changes, if your living arrangements at home change, you need to report that as soon as possible.

Exception to Claiming a Spouse

There is an exception to the rule that married couples must file jointly to receive a marketplace tax subsidy. If you are living separately from your spouse and are a victim of domestic abuse/violence or spousal abandonment, you may claim “unmarried” on the marketplace application without penalty.

As you can see from the table above, there is also a chance that you could receive lower out-of-pocket costs through the health insurance marketplace in addition to a tax subsidy. If your yearly income falls in the range shown above, you are eligible. The only catch is that you MUST enroll in a silver plan. Make sure you take a look at all the plans available to see if this benefit is the right one for you.

What if I am a Dependent on Someone Else’s Tax Return? Can I Get a Marketplace Tax Subsidy?

If you claimed as a dependent on someone else’s tax return you are not eligible to receive a subsidy through the health insurance exchange. You are still able to purchase a health insurance plan, but you will pay the full price for the plan. There are other options available as well.

Are all Marketplace Tax Subsidies the Same?

No, subsidies are given on a sliding scale. If you are at the higher end of the ranges shown above, you will not receive as much financial assistance when buying a health insurance plan on the exchange as someone at the lower end of the range.

Take Advantage of Subsidies

One goal of the Affordable Care Act was to provide health insurance at more affordable rates. Politics aside, the marketplace tax subsidy that is available to many people helps them purchase quality medical insurance at a low rate. It may not always be as low as what an employer could offer, but in many cases it is. When you fill out your application at the next Open Enrollment, make sure you take full advantage of a subsidy that is available to you.

With the health insurance exchanges, also known as health insurance marketplaces, set to open for business on October 1, 2013, the world of health insurance is about to change dramatically. Through these exchanges individuals will be able to purchase medical insurance by comparing plans, insurance companies, and premiums side by side on their computer screen.

One of the advantages of buying insurance through the marketplace is the possibility of obtaining a tax credit subsidy to help pay for the cost of the coverage. However, not everyone is eligible for the subsidy. One of the ways to not be eligible is to be offered affordable coverage with a certain level of benefits through your employer. But how do you know if your group coverage makes you ineligible for the tax credits? Your employer will provide you with a health insurance exchange notice.

What is the Health Insurance Exchange Notice?

The health insurance exchange notice will explain to you whether or not your coverage eliminates you from the subsidy. Employers are required to provide this notice to existing employees by October 1, 2013 and to new employees within 14 days of employment.

There has been some confusion about possible penalties given to employers who do not comply with the requirement to provide a health insurance exchange notice. Some reports suggested that there would be a $100 per day per employee penalty. The Department of Labor came out later and confirmed that there would not be a penalty for lack of compliance. Still, employees are encouraged to send the notice.

If your employer does not provide a notice, it is still important to find out if you are offered coverage that will keep you from being able to access the tax subsidy.

Why is the Health Insurance Exchange Notice Important?

The Patient Protection and Affordable Care Act requires every American to purchase health insurance or else face a tax. Since health insurance is an expensive addition to the budgets of many people, the law allows for subsidies to help pay for the premiums. However, if medical coverage is available through an employer, the subsidy is not available.

When an individual applies for coverage through the exchanges, the site will ask if group coverage is offered. To be accurate in answering this question, people can rely on the health insurance exchange notice provided by their employer.

Are Model Notices Available?

Model notices are available through the Department of Labor’s website.

Group Coverage can be an Inexpensive Option

Even if you are not eligible for a subsidy because of employer sponsored coverage, the group coverage is still a great option. The Affordable Care Act mandates that employers cannot charge employees more than 9.5% of their salary for coverage. In many cases, this premium will be less expensive than coverage purchased through an exchange, even with a subsidy in place. Therefore, not being able to get the tax credits because of available group coverage is not necessarily a bad thing.